June 29 (Bloomberg) -- JPMorgan Chase & Co.’s decision to
let Chief Investment Officer Ina Drew retire four days after the
bank disclosed a $2 billion loss in her division allowed her to
walk away with about $21.5 million in stock and options.

Drew, who resigned May 14, can keep $17.1 million in
unvested restricted shares and about $4.4 million in options
that she otherwise would have been required to forfeit if the
New York-based bank had terminated her employment “with
cause,” according to regulatory filings and estimates from
consulting firm Meridian Compensation Partners LLC.

A 30-year JPMorgan veteran, Drew also had accumulated
661,000 unrestricted shares of common stock worth about $23.7
million based on the May 14 closing price, $9.7 million in
deferred compensation and $2.6 million in pension pay as of Dec.
31, according to company filings. Altogether, Drew’s stock,
pension and deferred pay come to about $57.5 million.

“She was with that company for a long time,” said Frank
Glassner, a partner at Meridian in San Francisco. “She was an
incredibly talented, well-thought-of employee, not only within
the company but on the Street. A lot of this money had been
earned over a great deal of time, not just yesterday.”

Drew, 55, oversaw the London traders responsible for a $2
billion loss on credit derivatives that Chief Executive Officer
Jamie Dimon said “violated common sense.” Shares of the
largest U.S. bank have plunged 19.1 percent since Bloomberg News
first reported on April 5 that JPMorgan was having trouble
unwinding illiquid bets on credit derivatives. While Dimon told
lawmakers in separate hearings this month that the company could
claw back two years of bonuses, Drew’s pay probably won’t be
affected, according to compensation consultants.

Whole Picture

“You have to look at the whole scenario,” said Paul
Sorbera, president of executive search firm Alliance Consulting
in New York. “This woman was running a $370 billion portfolio,
and a $2 billion or $3 billion loss is 1 percent.”

Dimon said on May 10 that the loss could grow by $1 billion
or more this quarter. Charles Peabody, an analyst with Portales
Partners LLC in New York, estimated the amount has grown to
between $4 billion and $5 billion. The company is scheduled to
disclose details about its losses and its progress unwinding the
trades when it reports earnings on July 13.

JPMorgan’s long-term incentive plan gives Dimon, with
approval from the board, the right to reduce Drew’s restricted
stock or to further defer vesting if her performance wasn’t
satisfactory, according to an amendment to the company’s proxy
statement on executive compensation. Restricted stock also can
be deferred longer or forfeited if performance has “been
unsatisfactory for a sustained period of time.”

Forfeiting Stock

If Drew had forfeited any restricted stock or options, the
company would have had to disclose it in a public filing with
the U.S. Securities and Exchange Commission, Glassner said.
Securities laws require any changes in stock ownership to be
reported within two business days of the transaction, according
to the SEC.

The bank’s employment terms require executives to forfeit
unvested restricted stock and options, worth $21.5 million in
Drew’s case, if they are fired “with cause.” Because she was
allowed to retire and keep that money, the company probably
won’t claw back her bonuses, pay specialists said.

Clawback Causes

“If she was fired for cause, it would be a strong argument
for clawbacks,” Sorbera said. “Since she wasn’t fired for
cause, there is an argument that she was performing her duties
satisfactorily despite this one particular loss.”

Dimon, 56, told lawmakers June 13 that the bank probably
will seek to reclaim past bonuses from executives responsible
for the loss. The clawbacks will be “somewhat limited” to what
employees received in the previous two years, he said.

“The board will review every single person involved in
this case and figure out what’s appropriate,” Dimon said.

Drew had a long track record of success at JPMorgan and its
predecessor companies. Dimon commended her in announcing her
resignation and again in front of Congress, saying “the CIO
unit had done so well for so long” that he didn’t scrutinize
her work as much as he did with other executives.

CIO Profits

The former head of the CIO was the third-highest
compensated executive officer at the bank the past two years,
receiving $14 million for her work in 2011 and $15 million the
previous year, according to regulatory filings. Her division
made “several billion dollars” in the three or four years
preceding the loss on a book of credit derivatives designed to
profit if the U.S. economy weakened and corporations were under
duress, Dimon told lawmakers.

The CIO earned a peak of $3.7 billion in 2009. The bank
doesn’t break out results for the chief investment office, which
manages the bank’s excess deposits and hedges against risk.

Drew was credited with guiding the company through the
Russian debt crisis and the collapse of hedge fund Long-Term
Capital Management LP in 1998, as well as market dislocation
after the World Trade Center attacks, the Enron Corp. bankruptcy
in 2001 and the financial crisis in 2008.

“In the credit crisis, when banks were losing tens of
billions of dollars, she was making money,” Sorbera said.